Ladbrokes Coral and GVC return to table for £3.9bn takeover talks

In a joint statement, the companies said GVC has offered to buy Ladbrokes Coral for about £3.9bn.

GVC, whose brands include Sportingbet and Foxy Bingo, would pay cash and shares under the takeover which would see Ladbrokes Coral investors own 46.5% of the combined group.

Ladbrokes Coral and GVC Holdings today said they were in "detailed discussions" about a merger.

Shares in Ladbrokes Coral surged by 25% to 170p in early trading in London on Thursday. On Thursday they said GVC had made a non-binding cash and shares offer to Ladbrokes, with the final price determined by the outcome of the government's review into gambling machines in United Kingdom betting shops, which could hit profits at the target company.

The determination of the senior management positions are to be finalised over the coming weeks, but both parties have agreed that GVC's Kenneth Alexander will be the CEO of the enlarged group following completion.

"The boards believe that a transaction has the potential to create material shareholder value and that there is a compelling strategic rationale for the possible offer", the firms said in the statement.

"The enlarged group would be geographically diversified with a large portfolio of businesses across both regulated and developing markets, with the scale and resources to address the dynamics of a rapidly changing global industry". Although there has not been a firm offer, the two companies appear to be positive about the potential for a deal to be done.

The tie-up would put the newly formed group in a strong position in major markets such as the UK, Italy and Australia, it added.

Ladbrokes Coral has received a non-binding proposal from GVC regarding a possible offer for the entire issued and to be issued share capital of the company.

Ladbrokes completed its £2.3bn merger with Coral in November past year, but it is understood GVC first approached Ladbrokes over a tie-up when it was finalising the deal.

Ladbrokes has almost 3,700 bookies on the high street, while the Isle of Man-based GVC has a raft of brands after a series of acquisitions, most recently snapping up bwin.party in February 2016.